By Sam Waltz
Ellen Kullman, CEO of the DuPont Company since 2009, shocked Wall Street as well as her Delaware neighbors and employees by giving two weeks’ notice on Monday Oct. 5th of her intent to retire from DuPont on Friday Oct. 16th.
In a seemingly unprecedented move, without an obvious successor in sight, the Company’s Board of Directors has appointed Board member Edward Breen as its interim CEO. The Board reports it is starting its search for a successor.
Shares of DuPont increased in after-hours trading on the news. The Company earlier had lowered its 2015 Earnings-Per-Share (EPS) guidance to $2.75 from $3.10, surprising analysts who had expected $3.19. DuPont attributed it to currency exchange issues.
“Over the past seven years, with the dedication of our entire team, we have transformed this great company by focusing our portfolio, streamlining the organization, and driving innovation that leverages our unique science and engineering capabilities. With a strong foundation in place now is the right time for a new leader to continue to drive the pace of change to capitalize fully on the opportunity ahead,” said Kullman.
“I want to express my sincere thanks and admiration to all of my DuPont colleagues around the world. I have complete confidence that they will realize the enormous potential of the next generation DuPont.”
Ellen Jamison Kullman, 59, a member of the locally prominent Healy Family, became President of DuPont Oct 1, 2008, and CEO Jan 1, 2009. DuPont’s 19th executive, she was the first woman to lead the company in its 212-year history. She had joined DuPont in 1988 as a marketing manager in its medical imaging business, and immediately moved into a meteoric rise to the top of the company.
A Tufts University grad, she came to DuPont from General Electric, although she frequently talked about growing up in Wilmington where her neighbors all seemed to be Healy Family cousins. She was graduated from The Tower Hill School.
Her retirement at 59 will likely be attributed to the decay in DuPont’s recent earnings, as well as the criticism and pressure she faced from some investors, led by the Trian Fund and Nelson Peltz, DuPont’s 5th largest investor, which owns almost 3% of the Company. In addition, DuPont spinoff Chemours – which she ran until it was spun off July 1st this year – has disappointed analysts, a disappointment likely to be laid at her feet.
In a company that has prided itself on orderly transitions, this one may even set the stage for the recruitment of a CEO from outside the DuPont Company for the first time in its history. That no one seems to have been cultivated as her successor tends to validate the observation about the surprise of her retirement.
Historically, DuPont would develop its “rising stars,” finishing with a “class” of three or four or five executive or senior vice presidents from among whom the next CEO would become apparent. That seems not to be the case in this case.
The company said the revised outlook primarily reflects continued strengthening of the U.S. dollar versus currencies in emerging markets, particularly in Brazil, and a further weakening of agricultural markets, primarily in Brazil.